BUSINESS AND CORPORATE LAW BUSINESS AND CORPORATE LAW Name of the Student Name

BUSINESS AND CORPORATE LAW BUSINESS AND CORPORATE LAW 4 Civ 10 BUSINESS AND CORPORATE LAW BUSINESS AND CORPORATE LAW Name of the Student Name of the University Author Note Question 2.1 Issue The issue is what can be put in the formal written partnership agreement which have been made by Rachel and Emily and along with such if they borrow any kind of money from any financial institution then will they be personally liable for such if they cannot repay it from their business earnings. Application In this present

Running head: BUSINESS AND CORPORATE LAW
BUSINESS AND CORPORATE LAW
Name of the Student
Name of the University
Author Note

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Question 2.1
Issue
The issue is what can be put in the formal written partnership agreement which have been
made by Rachel and Emily and along with such if they borrow any kind of money from any
financial institution then will they be personally liable for such if they cannot repay it from their
business earnings.
Rule
A partnership form of business structure is considered to be operated when there are two
or more individuals involved to operate the business as all the co-owners share their income. The
partnership form of business structure is governed by the Partnership Act 1963. The partnership
form of business are considered to be less expensive and easier than the other companies to set
up. They carry on the business under their trading name and it is simpler to administer the
business. The profits along with the losses are considered to be shared between the partners. It
can be understood from the case of John Grimes Partnership Limited v Gubbins [2013] EWCA
Civ 37. A partnership firm and would not be liable for any losses. On the other hand, a general
partner would be liable for losses and would also gain profits under the partnership firm.
Application
In this present scenario, it can be said that Rachel and Emily would go into a business as
partners therefore, if they put any formal written partnership agreement then they need to lay
down the kind of partners they would be along with their liabilities. The agreement for
partnership should include partnership shares, partnership assets, Distribution of profits, liability
of partnerships, termination of partners and dispute resolution. Apart from that, if they borrow

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any money from any financial institution the partners would also be personally liable or
responsible apart from their business earnings since the assets and the liabilities of a partner are
shared between them.
Conclusion
Therefore, in this scenario, the partners Rachel and Emily are liable personally apart from
their business earnings.
Question 2.2
Issue
The issue that is to be discussed in this present scenario is whether Emily would be liable
for the injuries caused to Nina and pay for the damages along with Rachel.
Rule
Partners in a partnership firm are considered to share an agent principal relationship
where the partners would be vicariously liable for the acts done by the other partners. Therefore,
each and every partner are considered to be both principals as well as agents for the other
partners. The agency relationship is considered to be the foundation of the partnership. It can be
understood from the case of Brick and Pipe Industries Ltd v Occidental Life Nominees Pty Ltd
(1992) 10 ACLC 253. Therefore, it can be understood that the partners must not just act for
himself alone but for other partners as well. Therefore, the partners are representative of each
other. It can be understood from the case of Watteau v Fenwick [1893] 1 QB 346 is an 1893.

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Application
It can be understood from this particular scenario, that Nina had faced certain injuries due
to the knife, which had been sold to her by Rachel, and therefore she was trying to claim for
damages for her injuries from the partnership firm. From the above-mentioned rule, it can be
understood that the partners are considered to share an agent principal relationship with each
other and therefore, they would be liable for the acts done by others, as they are partners to a
firm. Therefore, if Rachel and Emily were general partners in this form of business then Emily
would also be liable to suffer but if she were a limited partner in the partnership firm then she
would not be liable as Emily would have limited liability and therefore would not suffer loss.
Conclusion
Therefore, it can be understood that since the partners share an agent principal
relationship they would be vicariously liable for the acts in the partnership firm.

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References
Brick and Pipe Industries Ltd v Occidental Life Nominees Pty Ltd (1992) 10 ACLC 253.
John Grimes Partnership Limited v Gubbins [2013] EWCA Civ 37.
Partnership Act 1963.
Watteau v Fenwick [1893] 1 QB 346 is an 1893.